Who actually pays the income taxes the federal government collects? Look at this chart.

Almost 80% of taxes is paid by people making $100,000 or more. That means just 2.7% of the taxpayers paid 51% of the taxes. Some 62% of individual filers paid a mere 5.7% of the taxes, and their average tax rate was 4.3% (not including Social Security taxes).

The top 1% of taxpayers accounted for more income taxes paid than the bottom 90% did. If you’re going to cut income taxes, you’re going to end up cutting taxes for “the rich.”

In the Best-Case, Unrealistic Scenario, We Are Still $800 Billion Short

I will give Ways and Means Committee Chairman Brady kudos for trying to do that with his border adjustment tax. Let’s look past the fact that I think a BAT will cause a global recession: Brady’s motive is good.

He certainly recognizes that in order to cut income taxes he’s going to have to go to a consumption tax of some form. Seriously, that is an extraordinarily brave position for a Republican in the House leadership to take.

That Ryan has signed on to it says that he too realizes they have to do something radical.

Get a Bird’s-Eye View of the Economy with John Mauldin’s Thoughts from the Frontline

This wildly popular newsletter by celebrated economic commentator, John Mauldin, is a must-read for informed investors who want to go beyond the mainstream media hype and find out about the trends and traps to watch out for. Join hundreds of thousands of fans worldwide, as John uncovers macroeconomic truths in Thoughts from the Frontline. Get it free in your inbox every Monday.